US DDGS exports reach record high in 2010

The United States, due to a 400% increase in ethanol exports in 2010, managed to increase its export of DDGS by 60% compared to 2009.

DDGS exports already doubled in2009 compared to 2008 and last year the increase was 60% totalling 9 million tonnes.

China was the largest buyer with 2.5 million tonnes, or 28% of the total. The remaining top importers were Mexico, Canada, South Korea, and Vietnam.

The upward trend in 2011 will be tempered because China in January started an anti-dumping investigation on US DDGS, which halted imports.

China largest consumer

In 2010 exports of DDGS to China skyrocketed and the final number for that year will be close to 3 million tonnes according to Mike Callahan, director of international operations for the U.S. Grains Council. Others have estimated it could reach as high as 5 million tonnes.

The official number for January to November 2010 is 2.3 mmt, a huge increase from the 445,058 mmt exported to China during the same time period in 2009.

Number 2 and 3 in the row, Mexico and China have been steady growth markets for US DDGS as well with 1.5 million tonnes to Mexico and almost 1 million tonnes to Canada in 2010.

Price is key

Overall, the price of imported DDGS compared to Chinese corn or imported corn prices appears to be the primary driver of DDGS imports to China, according to a USDA report.

Another thing that has helped the export to China was the availability of shipping containers and the growth of larger bulk shipments in ocean vessels.

Also taxes and duties are in the advantage of DDGS. For example, imported corn is assessed a 13% tax and a 1% import duty while DDGS is only assessed a 5% import duty.

Long-term supplies

As ethanol production increases, so does the supply of DDGS which is expected to reach 33.3 million tonnes for the 2009-’10 marketing year, according the USDA report on DDGS.

The potential for domestic and export use of US DDGS currently exceeds production and will probably continue to do so in the future.